5.4 Forecast horizon and form

• Forecast horizon is a number of future periods for which the forecast is made

• It is often defined with the nature of the analyzed variable, e.g. if it is unrealistic to assume that the variable would change similarly as in periods before, then long-term forecast are inappropriate

• Forecast classification considering the timescale:

1. Short-term 2. Medium-term 3. Long-term

• Point estimate or point forecast is a number (value) that represents the best estimation of a future value of analyzed variable

• Prediction interval is an interval in which future observations are expected to be, with certain probability level